Iowa Legislature Passes Premium Tax Reduction

In the closing days of the Legislative session, Iowa lawmakers passed two bills that will cut the premium tax for property/casualty insurers and rectify a court decision that adversely impacted workers’ compensation insurers.

Gov. Tom Vilsack has called the legislature back into special session, to begin April 22, to take up budget issues.

“Overall, the legislative session that ended late last Friday (April 12) was good for insurers,” National Association of Independent Insurers (NAII) Counsel Ann Weber commented. “We were able to get through the bills that we very much wanted and were not hurt by any other legislation.

“Senate File 2318 phases in a reduction in the premium tax from 2 percent to 1 percent over a four-year period, beginning in 2004. The change will make Iowa more competitive with other states.”

The workers’ comp bill, SF 2190, remedies Iowa Supreme Court decisions that mandated that insurers, when they pay for a second injury to a worker, must pay for the first injury again as well.

SF 2318 and SF 2190 both await the governor’s signature.

Vilsack already has signed the Insurance Department’s omnibus bill, Senate Bill 2279 that, among other provisions, requires insurers to provide 180 days notice to independent agents before terminating their contracts without specified cause.

Among bills that died during the session are:

House Bill 2020, authorizing the use of automatic cameras to identify vehicles that run red lights.

HB 2040, lowering the blood alcohol concentration level from .10 to .08 percent for the drunken driving purposes.

SB 400 and SB 440, restricting telephone solicitations.

SB 2087, providing civil remedies for insurance fraud.

SB 2200, specifying that an employer is not liable for benefits related to an employee’s pre-existing condition in paying permanent partial disability claims resulting from subsequent injuries unless the previous injury occurred while working for the same employer.

Topics Pricing Trends Iowa